Australian Farming Outlook 2025/26: A Record Year Followed by New Challenges in 2026/27

Australian agriculture has once again demonstrated why it is one of the most resilient industries in the world. Despite weather extremes, fluctuating global markets and rising production costs, the 2025/26 financial year is shaping up as one of the strongest on record.

However, the outlook for 2026/27 suggests farmers should prepare for tighter margins, drier seasonal conditions and increasing pressure on profitability.

Here’s what every Australian farmer should know.

2025/26 Snapshot – A Record Year

• Gross value of Australian agricultural production is forecast to reach around $101 billion — a record high.

• Agricultural exports are expected to exceed $80 billion, driven by strong livestock prices and large grain harvests. Australia’s winter crop is expected to be the second-largest on record, helped by favourable spring conditions.

• Livestock markets have remained strong thanks to continued demand from the United States, China and other export markets. DAFF

Major Industries at a Glance

🌾Cropping

• Wheat production remained exceptionally strong.
• Canola delivered another outstanding season.
• Barley exports continued to perform well.
• Grain quality was generally excellent across much of southern Australia.

🐄Beef

• Australian beef continued to enjoy strong international demand.
• Although herd rebuilding has slowed, export demand—particularly from the US—has helped maintain attractive cattle prices throughout much of 2025/26.

🐑 Sheep & Lamb

• Lamb prices stayed historically high due to tight supply.
• Wool markets also strengthened thanks to renewed demand from China.

🥛 Dairy

Milk production remained relatively stable, although higher feed, fuel and labour costs continued to pressure profitability.

🍎 Horticulture

• Horticulture continues to be one of Australia’s fastest-growing agricultural sectors and is expected to keep expanding into 2026/27.

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The Outlook for 2026/27

While Australian agriculture remains in a strong position, several challenges are emerging.

1. Lower Farm Production

ABARES forecasts total agricultural production value will fall to approximately $95–98 billion, primarily because of lower crop production and easing livestock prices.

2. Drier Seasonal Conditions

Much of southern Australia is forecast to receive below-average rainfall during key growing periods.

Reduced soil moisture could lower yields across many grain-growing regions.

3. Higher Input Costs

Farmers continue to face elevated costs for:

• Fuel
• Fertiliser
• Freight
• Farm chemicals

Geopolitical tensions have added further uncertainty around fertiliser supply and pricing.

4. Lower Farm Profits

Average broadacre farm profits are forecast to decline significantly during 2026/27 as production eases and costs remain high.

Commodity Forecasts

Commodity	2026/27 Outlook
Wheat	Lower production and softer prices
Canola	Production expected to ease after a record year
Barley	Exports remain strong but values soften
Beef	Prices ease slightly but global demand remains healthy
Lamb	Prices remain historically strong
Wool	Stable with continued Chinese demand
Dairy	Farmgate prices improve over the medium term despite lower production
Horticulture	Continued growth expected

Source: ABARES Agricultural Commodities Report 2026.

Frequently Asked Questions